East Asia's Economic Model Is No Miracle, Study Shows
Clayton Jones, writer of The Christian Science Monitor, The Christian Science Monitor
WHEN Japan asked the World Bank to study East Asia's "model" of economic success, it got more than it bargained for. The study, although titled "The East Asia Miracle: Economic Growth and Public Policy," finds neither a miracle nor any unique method used to create the most economically dynamic region in the world.
"The process of growth in East Asia does not differ significantly from economic growth in any other regions of the developing world," declares John Page, team leader of the study, which was released yesterday. While the 389-page report praises Japan and eight other East Asian nations for simply practicing good fundamental economics, the other conclusions are likely to disappoint the Japanese government, which paid for the study.
Since the late 1980s, when Japan's economy hit a postwar peak, officials in Tokyo have tried to counter Western criticism that Japan has used anticompetitive mercantile practices to dominate global industrial markets. And since the end of the cold war, Japan has tried to convince China, Russia, and other emerging market economies to follow its "model" rather than Western-style capitalism. A history of how Japanese companies were coached to become global exporters by the Ministry of International Trade and Industry (MITI) - written by MITI itself - is being translated into several languages.
Within the World Bank and other multilateral institutions, Japan has tried to quietly win converts to its economic ways and to tilt lending to developing nations in favor of government-led industrial policies. But MITI's success has "bedeviled" Japan since the late 1970s, the Bank's study concludes. Japan's trading partners have protested loudly, and MITI now uses industrial policy "to prevent trade conflicts and to control and limit the damage from those that occurred."
MITI's adaptability has been essential to Japan's success. A common thread among East Asian policymaking, the report states, has been the "pragmatic flexibility with which governments tried policy instruments in pursuit of economic objectives. …